Mamaearth, the D2C unicorn, marked its debut on the Indian stock exchange NSE, opening with a nearly 2% premium. The shares were listed at INR 330, showing a listing gain of INR 6 from the issue price of INR 324.
Mamaearth’s shares debuted on the BSE with a flat listing at INR 324.
In the early hours of trading, Mamaearth shares reached INR 337.60 per share, but they later stabilized at INR 331.45 on the NSE. Presently, the company holds a market capitalization of $1.28 billion.
Honasa Consumer Limited (HCL), the company behind Mamaearth, allocated 2.36 crore equity shares to anchor investors, generating INR 765.2 crore in funds as a component of its initial public offering (IPO).
Read More: Honasa’s Mamaearth IPO attracts INR 765.2 Crore from anchor investors ahead of IPO launch
On its first day, the IPO received a tepid response, registering a subscription rate of only 0.13X. According to BSE data, the offering attracted bids for 36.25 lakh shares out of the 2.88 crore shares available. Interestingly, the segment designated for employees was oversubscribed by 1.98X by the close of the day, as employees bid for 67,344 shares against the 34,013 shares allotted.
Read More: Mamaearth IPO receives lukewarm response, subscribed 0.13 times on day one
On the final day of the public issue, the IPO saw significant oversubscription of 7.61X, primarily due to strong interest from qualified institutional buyers (QIBs). It garnered bids for 22 crore shares compared to the 2.89 crore shares on offer.
Read More: Mamaearth’s IPO sees remarkable 7.61x oversubscription, fueled by strong demand from QIBs
Early-stage investors have reaped substantial profits from the listing. At the highest listing price of INR 324, Snapdeal cofounders Rohit Bansal and Kunal Bahl are poised to achieve returns of nearly 101X on their initial investment, whereas actor Shilpa Shetty is anticipated to witness returns of 7.74X.
Within the group of angel investors involved in Mamaearth’s OFS segment, the standout beneficiary appears to be Rishabh Mariwala of Sharrp Ventures. At the highest listing price, he is expected to gain a substantial windfall of INR 181.23 crore, representing a return of over 53X on his initial investment of INR 6.05 per share. Following the sale, he will retain ownership of 34.2 lakh shares with a combined value of INR 110.81 crore.
Commenting on the startup’s stock market debut today, Prashanth Tapse, Senior VP Research Analyst at Mehta Equities, remarked that the flat listing aligns with the brokerage’s anticipated outcome.
“Though risky investors feel the price is good for long-term as the business model has high potential of growth, we would continue to remain cautious on Mamaearth on the back of the loss-making nature of the business, high portion of OFS, high competition with margin pressure, low promoter stake, and weak financials which suggest a cautionary stand as historical listings with high valuations have often faced post-listing challenges,” Tapse added.
Established in 2016 by a husband-wife team, Mamaearth has grown to encompass a diverse portfolio of brands within its parent company, Honasa Consumer. The startup presides over four beauty and personal care brands, namely The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s.
Mamaearth has announced that the funds raised from the fresh issue will be allocated towards bolstering marketing endeavors, amplifying brand presence, setting up new exclusive brand outlets, and extending the network of BBlunt salons.